Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.........................1
2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .. . 1
2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 1
2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.................2
2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .. 3
2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .. 3
2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .. 4
2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.......................5
2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.................5
2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................6
2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
..................6
2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .. 6
2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 7
2.4 Service Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.......................7
2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. 7
2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 8
2.7 Macro environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.......................8
3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 9
3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 9
3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. 9
3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 9
3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. . 10
3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 11
3.7.1 Services and Service Marketing . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 11
3.7.2 Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . 11
3.7.3 Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .. . 11
3.7.4 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . 12
3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. 12
4.0 Financials, Budgets, and Forecasts . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .. 12
4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. 13
4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 14
4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 15
4.4 Linking Sales and Expenses to Strategy . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 17
4.5 Contribution Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .. . 17
5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 19
5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .. 19
5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 20
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
CURRANT SITUATION
SITUATION ANALYSIS
P & A.net INFORMATION WORLD just opened its doors fo r business
a little over a six month ago. Business is good, and Customers have
been impressed with our offerings, but we need to focus our efforts on
Implementing the strategies, programs, and tactics outlined in the
original business plan.
Differentiating ourselves from other more traditional cafes has given us
the ability to effectively compete on the beverage and pastry side of the
business with the already entrenched competition. Sales are brisk and
in-line with projections.
The local community is rapidly accepting the Internet services side of
the business.
Memberships are meeting the projections outlined in the business plan,
and sales of Internet services are meeting the goals forecast. Students
love to gather for late-night sessions, nearby seniors are getting a
glimpse of what the Internet offers, and local business people love to
stop by for a quick bite and an email check.
MARKET SUMMARY
P & A.net INFORMATION WORLD is faced with the exciting
opportunity of being the first -mover in the local cyber-café market. The
consistent popularity of coffee, combined with the growing interest in
the Internet, has been proven to be a winning concept in other markets
and will produce the same results here.
All three target markets for the P & A.net INFOR MATION WORLD
service are growing at a relatively fast pace. We're faced with a large
number of potential customers, and we're offering a needed service.
TARGET MARKET GROWTH:
•University students continue to grow at a steady pace, at nearly 4%.
• Office workers in the downtown area and nearby professional
buildings continue to add Value, growing at 3%.
• Seniors are becoming an important part of downtown business,
growing at almost 6%.
• Teens continue to play a major role in downtown foot -traffic, growing
at 2%.
Graph
MARKET DEMOGRAPHICS
P & A.net INFORMATION World’s customers can be divided into two
groups. The first group is familiar with the Internet and desires a
progressive and inviting atmosphere where they can get out of their
offices or homes to enjoy a great cup of coffee and Internet access.
This group is made up of students from the college and business people
from nearby town offices and professional centers.
The second group is not as familiar with the Internet. This group is
made up of seniors from the town retirement centers. Seniors represent
a growing segment of Internet users. They use the Internet to
communicate with friends and family and they will be regular users of
the P & A.net INFORMATION WORLD service.
Table: Market Analysis
Po tential Custo mer s
CAGR
college Stud ents
4 .00 %
Office Worker s
3 .00 %
Senio rs
6 .00 %
Total
3 .59 %
Gr o wth
4%
2 0 01
1 0,000
3%
6%
2 002
10,4 00
2 003
2 0 04
2 005
10,816
11,2 49
11,699
20,0 00
2 0,600
3 ,000
3 ,180
3 ,3 71
3 4,1 80
3 5,4 05
3 .59 % 33,000
21 ,218
21,855
22 ,511
3 ,5 73
3 ,787
3 6,6 77
37 ,997
MARKET NEEDS
Factors, such as addiction, and historical sales data ensure that the high
demand for coffee will remain constant over the next five years.
The rapid growth of the Internet and online services that has been
witnessed worldwide is only the beginning of a long -lived trend
towards an economy built on the infrastructure of the Internet. The
potential growth of the Internet is enormous, to the point where one
day, a computer terminal with an online connection will be as common
and necessary as a telephone or toilet. This may be 5 or 10 years down
the road, but for the next five years, the online service provider market
is sure to experience tremendous growth. Establishing itself as th e first
cyber-cafe in the area, P & A.net INFORMATION WORLD will enjoy
the first-mover advantages of name recognition and customer loyalty.
Initially, P & A.net INFORMATION WORLD will hold a 100 percent
share of the cyber-cafe market locally. In the next five years,
competitors will enter the market. P & A.net INFORMATION WORLD
has set a goal to consistently maintain a market share of greater than
fifty percent.
MARKET TRENDS
The Internet has become a point of conversation in almost all social
groups. People are talking about sites they visited, business people are
talking about Internet-based businesses, and kids are talking about the
latest Internet clubs and chat rooms. People like to communicate their
Internet experiences with their friends, colleagues, and family.
However, it can be difficult to do it in front of a computer terminal at
the office or in the family study. A comfortable place to gather and
share these experiences is becoming a real need.
P & A.net INFORMATION WORLD Will Provide:
• A meeting place for business people interested in sharing their
Internet-based business ideas.
• A social hub for students and young people interested in sharing a
beverage and their Internet experiences with friends.
• A place for nearby seniors to gather and learn about the powers of the
Internet and better communication methods.
• A stopping point for travelers in need of an Internet connection.
A market survey was conducted in the Fall of 2006. Key questions were
asked of fifty potential customers. Some key findings include:
• 35 subjects said they would be willing to pay for access to the
Internet. Rs. 15 an hour was the most popular hourly Internet fee.
• 24 subjects use the Internet to communicate with others on a regular
basis.
MARKET GROWTH
The market for the services P & A.net INFORMATION WORLD will
offer is growing rapidly. The cyber-cafe hasn't come to this area yet,
but similar services are growing rapidly on a global scale. Large cities
that cater to large numbers of traveling business peop le and tourists
have been saturated with businesses offering the services P & A.net
INFORMATION WORLD will offer. Business people use the Internet
services to catch up on email and communications with their family,
and tourists do the same. Our area suppor ts a population that has many
of the same needs and interests of this larger group.
The student population continues to grow as the college grows in
popularity with high school graduates from out of state. These students
tend to have money and an interest in upscale social centers. Business
in the town area is on the rise with the coming completion Have the
renovated Fifth Street Market and the new Comp -tech facility. P &
A.net INFORMATION WORLD will target these groups with radio and
TV spots on local stations.
SWOT ANALYSIS
The SWOT analysis provides us with an opportunity to examine the
internal strengths and weaknesses P & A.net INFORMATION WORLD
must address. It also allows us to examine the opportunities presented
to P & A.net INFORMATION WORLD as well as potential threats.
P & A.net INFORMATION WORLD has a valuable inventory of
strengths that will help it succeed. These strengths include:
A knowledgeable and friendly staff, state -of-the-art computer hardware,
and a clear vision of the market need. Strengths are valuable, but it is
also important to realize the weaknesses P & A.net INFORMATION
WORLD must address. These weaknesses include:
A dependence on quickly hanging technology, and the cost factor
associated with keeping state-of-the art computer hardware.
P & A.net INFORMATION World’s strengths will help it capitalize on
emerging opportunities. These opportunities include, but are not limited
to, a growing population of daily Internet users, and the growing social
bonds fostered by the new Internet communities. Threats that P & A.net
INFORMATION WORLD should be aware of include, the rapidly
falling cost of Internet access, and emerging local competitors.
2.2.1 STRENGTHS
1. Knowledgeable and friendly staff. We've gone to great lengths at
P & A.net INFORMATION WORLD to find people with a passion
for teaching and sharing their Internet experiences. Our staff is
both knowledgeable and eager to please.
State-of-the art equipment. Part of the P & A.net INFORMATION
WORLD experience includes access t o state of-the-art computer
equipment. Our customers enjoy beautiful flat -screen displays,
fast machines, and high-quality printers.
2. Up-scale ambiance. When you walk into P & A.net
INFORMATION WORLD, you'll feel the technology. High
backed mahogany booths with flat-screen monitors inset into the
walls provide a hideaway for meetings and small friendly
gatherings. Large round tables with displays viewable from above
provide a forum for larger gatherings and friendly "how -to”
classes on the Internet. Aluminu m track lighting and art from
local artists sets the mood. Last, but not least, quality cappuccino
machines and a glass pastry display case provide enticing
refreshments.
3. Clear vision of the market need. P & A.net INFORMATION
WORLD knows what it takes to build an upscale cyber cafe. We
know the customers, we know the technology, and we know how
to build the service that will bring the two together.
2.2.2 WEAKNESSES
1. A dependence on quickly changing technology. P & A.net
INFORMATION WORLD is a place for p eople to experience the
technology of the Internet. The technology that is the Internet
changes rapidly. Product lifecycles are measured in weeks, not
months. P & A.net INFORMATION WORLD needs to keep up
with the technology because a lot of the P & A.net
INFORMATION WORLD experience is technology.
2. Cost factor associated with keeping state -of-the-art hardware.
Keeping up with the technology of the Internet is an expensive
undertaking. P & A.net INFORMATION WORLD needs to
balance technology needs with the ot her needs of the business.
One aspect of the business can't be sacrificed for the other.
2.2.3 OPPORTUNITIES
1. Growing population of daily Internet users. The importance of the
Internet almost equals that of the telephone. As the population of
daily Internet users increases, so will the need for the services P
& A.net INFORMATION WORLD offers.
2. Social bonds fostered by the new Internet communities. The
Internet is bringing people from across the world together unlike
any other communication medium p & A.net INFOR MATION
WORLD will capitalize on this social trend by providing a place
for smaller and local Internet communities to meet in person. P &
A.net INFORMATION WORLD will grow some of these
communities on its own by establishing chat areas and community
programs. These programs will be designed to build customer
loyalty.
THREATS
1. Rapidly falling cost of Internet access. The cost of access to the
Internet for home users is dropping rapidly. Internet access may
become so cheap and affordable that nobody will be willing to
pay for access to it. P & A.net INFORMATION WORLD is aware
of this threat and will closely monitor pricing.
2. Emerging local competitors. Currently, P&A.net INFORMATION
WORLD is enjoying a first-mover advantage in the local cyber cafe market. However, additional competitors are on the horizon,
and we need to be prepared for their entry into the market. Many
of our programs will be designed to build customer loyalty, and it
is our hope that our quality service and upscale ambiance won't be
easily duplicated.
3. Mobile service provider also provide at chip rate
COMPETITION
The dual product/service nature of P & A.net INFORMATION World’s
business faces competition on two levels. P & A.net INFORMATION
WORLD competes not only with coffee retailers, b ut also with Internet
service providers. The good news is that P & A.net INFORMATION
WORLD does not currently face any direct competition from other
cyber cafes in the local market. There are a total of three cyber cafes in
the state: one located in Baroda and two in Ahmedabad.
Heavy competition between coffee retailers creates an industry where
all firms face the same costs. There is a positive relationship between
price and quality of coffee. Some coffees retail at Rs 8/cup , while
other more exotic beans may sell for as high as Rs 12/cup. Wholesalers
Sell beans to retailers at an average of a 50% discount. For example, a
cup of Sumatran beans wholesales for Rs 6 and retails for Rs 11. And
as in most industries, price decreases as volume increases.
SERVICE OFFERING
P & A.net INFORMATION WORLD will provide its customers with
full access to the Internet and common computer programs and
equipment. Some of the Internet and computing services available to P
& A.net INFORMATION WORLD customers are listed below :
• Access to external POP3 email accounts.
• Customers can sign up for a P & A.net INFORMATION WORLD
email account. This account will be managed by P & A.net
INFORMATION WORLD servers and accessible from computer
systems outside the P & A.net INFORMATIO N WORLD network.
• Access to Netscape or Internet Explorer browsers.
• Access to laser and color printing.
• Access to popular software applications, like Adobe Photoshop and
Microsoft Word.
P & A.net INFORMATION WORLD will also provide its customers
with access to introductory Internet and email classes. These classes
will be held in the afternoon and late in the evening. By providing these
classes, P & A.net INFORMATION WORLD will build a client base
familiar with its services. The computers, Interne t access, and classes
wouldn't mean half as much if taken out of the environment P & A.net
INFORMATION WORLD will provide. Good coffee, specialty drinks,
bakery goods, and a comfortable environment will provide P & A.net
INFORMATION WORLD customers with a home away from home; a
place to enjoy the benefits of computing in a comfortable and well kept
environment.
KEYS TO SUCCESS
The keys to the success for P & A.net INFORMATION WORLD are:
• The creation of a unique, innovative, upscale atmosphere that will
differentiate P & A.net INFORMATION WORLD from other local
coffee shops and future Internet cafes.
• The establishment of P & A.net INFORMATION WORLD as a
community hub for socialization and entertainment.
• The creation of an environment that won't int imidate the novice user.
P & A.net INFORMATION WORLD will position itself, as an
educational resource for individuals wishing to learn about the benefits
the Internet has to offer.
• Great coffee and bakery items.
CRITICAL ISSUES
The risks involved for P & A.net INFORMATION WORLD are:
• Will there be a continuing demand for the services offered by P &
A.net INFORMATION WORLD?
• Will the popularity of the Internet continue to grow, or is the Internet
a fad?
• Will individuals be willing to pay for the services P & A.net
INFORMATION WORLD offers?
• Will the cost of accessing the Internet from home drop so
significantly that there will not be a market for Internet Cafes such as P
& A.net INFORMATION WORLD?
MACROENVIRONMENT
The retail coffee industry in this area experienced rapid growth at the
beginning of the decade and is now moving into the mature stage of its
life cycle. Many factors contribute to the large demand for good coffee:
The student population at the college is a main source of demand for
coffee retailers, the cold and damp climate is extremely conducive to
coffee consumption, and current trends in the center Gujarat reflect the
popularity of quality coffee and specialty drinks. The popularity of the
Internet is growing exponentially. Thos e who are familiar with the
information superhighway are well aware of how fun and addicting
surfing the Internet can be. Those who have not yet experienced the
Internet need a convenient, relaxed atmosphere where they can feel
comfortable learning about and utilizing the current technologies. P &
A.net INFORMATION WORLD seeks to provide its customers with
affordable Internet access in an innovative and supportive environment.
MARKETING STRATEGY
P & A.net INFORMATION WORLD has three main strategies. The first
strategy focuses on attracting novice Internet users. By providing a
novice-friendly environment, P & A.net INFORMATION WORLD
hopes to educate and train a loyal customer base. The second and most
important strategy focuses on pulling in power Intern et users. Power
Internet users are extremely familiar with the Internet and its offerings.
This group of customers serves an important function at P & A.net
INFORMATION WORLD. Power users have knowledge and web
browsing experience that novice Internet user s find attractive and
exciting. The third strategy focuses on building a social environment
for P & A.net INFORMATION WORLD customers. A social
environment that provides entertainment will serve to attract customers
that wouldn't normally think about using the Internet. Once on location
at P & A.net INFORMATION WORLD, these customers that came for
the more standard entertainment offerings, will realize the potential
entertainment value the Internet can provide.
MISSION
P & A.net INFORMATION WORLD has o ne purpose.
P & A.net INFORMATION WORLD provides communities with the
ability to access the Internet, enjoy a cup of coffee, and share Internet
experiences in a comfortable environment.
P & A.net INFORMATION World’s marketing will consistently build
on this mission. Everything we do, from the pricing structure for our
services to the ambiance we create, must be done with this mission in
mind.
We cater to: downtown business people, traveling business people,
college students, and seniors. Our ambiance and our services are
designed for this clientele and our marketing efforts are focused on
capturing this market.
MARKETING OBJECTIVES
P & A.net INFORMATION World’s marketing objectives for the first
three years of operation include:
• Grow total sales by 10% annually.
• Diversify the service offering to insulate the business against
fluctuations in any one component of the revenue stream.
• Build customer loyalty through educational programs.
• Maintain a staff of enthusiastic employees excited to share their
Internet knowledge with P & A.net INFORMATION WORLD
customers.
• Build the P & A.net INFORMATION WORLD brand to the point
where it becomes a household word in the area.
FINANCIAL OBJECTIVES
The goal of this marketing plan is to outline the marketi ng strategies,
tactics, and programs that will make the vision outlined in the P &
A.net INFORMATION WORLD business plan a reality in the year
2008. The vision outlined in the business plan includes sales of roughly
Rs 275,000 in the first year with that figure increasing 10% annually.
TARGET MARKETING
P & A.net INFORMATION WORLD intends to cater both to people
who want a guided tour of the Internet and to experienced users eager
to indulge their passion for computers in a social setting. Furthermore,
P & A.net INFORMATION WORLD will be a magnet for local and
raveling professionals who desire to work or check their email
messages in a friendly atmosphere. These professionals will either use
P & A.net INFORMATION World's PCs, or plugs their own notebook
computers into Internet connections. P & A.net INFORMATION
World’s target market covers a wide range of ages: from members of
"Generation X," who grew up surrounded by computers, to seniors from
local retirement centers.
Our primary target markets include:
• Students. The large student population will become an important part
of the P & A.net INFORMATION WORLD customer base. The student
population continues to grow with the success of the college . Evening
entertainment, access to the Internet, and the up -scale ambiance will
attract this demographic.
• Business people. The town business community is growing rapidly
with the addition of a new Comp-tech building and a flurry of new
professional centers. P & A.net INFORMATION WORLD will provide
a perfect setting for business meetings. It will also give raveling
business people an opportunity to plug their laptops into the P & A.net
INFORMATION WORLD network to check email communications.
•Seniors. Represent a growing population of Internet users. P & A.net
INFORMATION WORLD will target the seniors in the nearby town
retirement centers by offering "Introduction to the Internet" classes.
The P & A.net INFORMATION WORLD staff will hold brief classes in
the off hours to educate seniors on how to use the Internet to
communicate with friends and family. This will build a regular base of
customers that wouldn't typically use the services offered by P & A.net
INFORMATION WORLD.
POSITIONING
P & A.net INFORMATION WORLD will position itself as an upscale
coffee house and Internet service provider. Business people of all types
will use P & A.net INFORMATION WORLD as a place to hold
meetings and catch-up on email communications. Students from nearby
town housing centers will use P & A.net INFORMATION WORLD as a
place to socialize and discuss the latest Internet sites. Seniors from
town retirement centers will experience the Internet for the first time at
P & A.net INFORMATION WORLD. Programs designed to teach
newcomers about the power of the Internet would help build customer
loyalty and spread the word about the services P & A.net
INFORMATION WORLD offers.
STRATEGY PYRAMIDS
The following are the three key strategies P & A.net INFORMATION
WORLD will focus on:
P & A.net INFORMATION World’s first strategy focuses on attracting
novice Internet users. P & A.net INFORMATION WORLD plans on
attracting these customers by:
• Providing a novice-friendly environment. Knowledgeable employees
focused on serving the customer’s needs will staff P & A.net
INFORMATION WORLD.
• A Customer Service desk will always be staffed. If a customer has any
type of question or concern, a P & A.net INFORMATION WORLD
employee will always be available to assist.
• P & A.net INFORMATION WORLD will offer introductory classes on
the Internet and email. These classes will be designed to help novice
users familiarize themselves with these key tools and the P & A.net
INFORMATION WORLD computer systems.
P & A.net INFORMATION World’s second strategy will be focused on
attracting power Internet users who will provi de an important function
at P & A.net INFORMATION WORLD. P & A.net INFORMATION
WORLD plans on attracting this type of customer by:
• Providing the latest in computing technology.
• Providing scanning and printing services.
• Providing access to powerful software applications.
The third strategy focuses on building a social environment for P &
A.net INFORMATION WORLD customers. A social environment that
provides entertainment will serve to attract customers that wouldn't
normally think about using the Inte rnet. Once on location at P & A.net
INFORMATION WORLD, these customers that came for the more
standard entertainment offerings will realize the potential entertainment
Value the Internet can provide.
MARKETING MIX
P & A.net INFORMATION World’s marketing efforts will focus on
building a loyal base of customers that will use the services provided
on an almost daily basis.
SERVICES AND SERVICE MARKETING
As the popularity of the Internet continues to grow at an exponential
rate, easy and affordable access to the information superhighway is
quickly becoming a necessity of life. P & A.net INFORMATION
WORLD provides the local community with the ability to access the
Internet, enjoys a cup of coffee, and share Internet experiences in a
comfortable environment. People of all ages and backgrounds will come
to enjoy the unique, upscale, educational, and innovative environment
that P & A.net INFORMATION WORLD provides.
PRICING
P & A.net INFORMATION WORLD bases its prices for coffee and
specialty drinks on the "Retail Profit Analysis" provided by our
supplier, Allan Brothers Coffee Co., Inc. Allan Brothers has been in the
coffee business for 22 years and has developed a solid pricing strategy.
Determining a fair market, hourly price for online use is more difficu lt
because there is no direct competition from another cyber -cafe in our
area. Therefore, P & A.net INFORMATION WORLD considered three
Sources to determine the hourly charge rate. First, we considered the
cost to use other Internet servers, whether it is a local networking firm
or a provider such as America Online. Internet access providers use
different pricing schemes. Some charge a monthly fee, while others
charge an hourly fee. In addition, some providers use a strategy with a
combination of both pricing schemes. Thus, it can quickly become a
high monthly cost for the individual. Second, P & A.net
INFORMATION WORLD looked at how cyber -cafes in other markets
such as Baroda and Ahmedabad went about pricing Internet access.
Third, P & A.net INFORMATION WORL D used the market survey
conducted in the fall of 2006. Evaluating these three factors resulted in
P & A.net INFORMATION World’s hourly price of Rs.15.
PROMOTION
P & A.net INFORMATION WORLD will spend almost fifty thousand
rupees in its first year of operations to build a brand and a loyal
customer base. Marketing efforts will be focused on the local market,
and the campaign will run the entirety of 2007, increasing roughly 10%
per year to match increased sales revenue. The marketing budget will
consistently equal almost 20% of sales.
A Few Specific Marketing Efforts:
•
•
•
•
•
Local TV spots
Print Materials
Local Newspapers
Local Radio Spots
P & A.net INFORMATION WORLD Events Service
This topic is a critical reminder of the fact that P & A.net
INFORMATION WORLD is a service business. The success of
Our business depends upon the quality of the service we offer and
delivering that service consistently. P & A.net INFORMATION
WORLD is dedicated to delivering this quality service.
Dedicated to Quality Service Programs:
• We’ve gone to great lengths at P & A.net INFORMATION WORLD to
find people with a passion for teaching and sharing their Internet
experiences. Our staff is both knowledgeable and eager to please. An
excess of staff members will consistently b e on hand to provide service
to P & A.net INFORMATION WORLD customers. Performance will be
frequently evaluated both internally and through customer surveys.
• A highly valued member of the P & A.net INFORMATION WORLD
staff will be the "Customer Happiness Representative." This individual
will be available forty hours a week to monitor the level of happiness
amongst P & A.net INFORMATION WORLD customers. This
individual will be responsible for:
Developing customer satisfaction programs, monitoring happiness
levels, responding to customer concerns, and the general well being of
every P & A.net INFORMATION WORLD customer.
MARKETING RESEARCH
In 2006, a market survey was conducted to help evaluate the business
viability prior to its inception. The surve y was a valuable resource for
establishing pricing and market needs. We will continue to conduct a
survey of our customers and potential customers on an annual basis.
Survey results will be used to create new marketing programs and
monitor the performance of current marketing programs.
FINANCIALS, BUDGETS, AND FORECASTS
The marketing plan is built on these truths:
1. The marketing budget is based on a percentage of sales value.
Currently, that value is set at 20%.
2. Building a strong brand and brand loyalty is critical to the success
of P & A.net INFORMATION WORLD.
3. Marketing is a critical component of the P & A.net
INFORMATION WORLD business plan.
4. The relationship between marketing dollars spent and revenues
generated is positive only to a certain point. We don't feel that a
marketing budget based on 20% of sales is close to that point
where additional marketing dollars spent won't create additional
revenue. If we can manage, we plan to spend more than 20% of
sales on marketing in future years. However, we wa nt to keep this
relationship in mind as we consider spending more on marketing
efforts.
5. Our understanding of the need for strong branding and emphasis
on marketing gives us a competitive edge over other cafes in our
area and potential competitors.
BREAK-EVEN ANALYSIS
P & A.net INFORMATION WORLD is operating in an industry capable
of supporting high gross margins. Variable costs in relationship to per unit revenues are low. Variable costs are equal to roughly 25% of per units revenues. It is our hope that as we move into the future and
continue to build relationships with our suppliers, this value will
decrease further, approaching a value of 20%.
Fixed costs for P & A.net INFORMATION WORLD equal almost Rs.
7,500. Fixed costs include: payment of debt, fac ility lease costs,
hardware costs, and other costs P & A.net INFORMATION WORLD
must maintain on a monthly basis. These costs are fixed and aren't
impacted by an increase or a decrease in sales.
Currently, P & A.net INFORMATION WORLD will break even at a
monthly sales point of Rs.10, 000.
Sales Forecast Revenues for the first year of operation are based on an
almost 10% growth rate from month to month. This is an aggressive
estimate, but we feel that our strong emphasis on marketing will have
positive results. Annually, beyond the first year of operations, we're
predicting a Growth rate of roughly 10%. We'll have a better idea of
potential growth rate beyond year one as we make our way through our
first year. The plan will be updated as we receive more infor mation.
\
EXPENSE FORECAST
The marketing budget will consistently equal approximately 20% of
sales. One of our strongest strengths is our marketing and brand
building capabilities, and the aggressive marketing budget is a
reflection of the importance we attribute to our marketing activities.
Currently, the marketing budget beyond year one remains set at 20% of
sales. It is our hope to increase this budget should sales and
efficiencies of scale allow us to do so.
Explanation of Major Marketing Expenses:
• Local TV spots... In our first year of operations, we will spend Rs.23,
000 on TV spots. TV spots allow us to reach a large audience and
effectively target our market.
• Print Materials... Print materials always require a significant budget .
They include: flyers, literature distributed internally, novelties for
customers, coupons, and anything else we can squeeze into this budget.
• Local Newspapers... An important part of our marketing efforts.
Newspapers ads will give us a vehicle for cons istently getting our
message/brand in front of a large number of potential customers. We
believe this vehicle will get our message to seniors, which make up a
large portion of our target market. In addition, the business section will
Provide us with a means for communicating with our business
customers.
• Local Radio Spots... These are an inexpensive way to secure a large
number of daily impressions.
• P & A.net INFORMATION WORLD Events... This will include local
radio and TV events where radio and TV stat ions broadcast from the P
& A.net INFORMATION WORLD site offering freebies to first -time
customers for stopping by. P & A.net INFORMATION WORLD will
also run educational programs and community events throughout the
year.
• Customer Happiness Representative ... This employee will monitor the
level of happiness amongst P & A.net INFORMATION WORLD
customers. They will be responsible for: developing customer
satisfaction programs, monitoring happiness levels, responding to
customer concerns, and the general well being of every P & A.net
INFORMATION WORLD customer.
Linking Sales and Expenses to Strategy
Our marketing expenses are tied directly to our sales revenue. As sales
increase, the marketing expenses will increase. Currently our marketing
expenses equal roughly 20% of sales, and we hope to increase that
value in the future. Our programs will be monitored for efficiency and
return on investment. Most notably, we want to pay close attention to
the value
of the "Customer Happiness Representative." This componen t of our
marketing budget is expensive, and we want to track the value of the
program to make sure we're optimizing our budget. Periodically, we
will survey our customers to determine the effectiveness of our
programs, and we'll adjust the marketing mix ap propriately based on
our findings.
Sales vs. Expenses Monthly
4.5 Contribution Margin
The Contribution Margin chart and table presents a strong outlook for P
& A.net INFORMATION World’s first year of operations.
1. Sales increase an average of 10% per month in the first year.
2. Contribution margin runs at roughly 50%.
3. The marketing budget is consistently based on 20% of total revenue.
4. A strong focus on local TV and radio is apparent in the expense
breakdown.
5. The marketing budget is spread evenl y throughout the year.
Contribution Margin Monthly
The goal of this marketing plan is to outline the strategies, tactics, and
programs that will make the sales goals outlined in the P & A.net
INFORMATION WORLD business plan a reality in the year 2000. We
have these marketing obstacles to face:
•The creation of a unique, innovative, upscale atmosphere that will
differentiate P & A.net INFORMATION WORLD from other local
coffee shops and future Internet cafes.
•The establishment of P & A.net INFORMATION WORL D as a
community hub for socialization and entertainment.
•The creation of an environment that won't intimidate the novice user. P
& A.net INFORMATION WORLD will position itself as an educational
resource for individuals wishing to learn about the
Benefits the Internet has to offer. Our marketing efforts will be focused
on building the image outlined above. We have milestones and sales
goals to meet and a business plan outlining our first and second year of
Business in detail. It will be critical to use th is marketing plan and the
P & A.net INFORMATION WORLD business plan as
Living/working documents. We can't allow them to sit in a file. They
must be used as a map for the future success of P & A.net
INFORMATION WORLD.
5.1 Implementation Milestones
The milestones chart below outlines key dates that the marketing team
must meet. The milestones table includes both sales goals and deadlines
for major projects that impact the programs outlined in the Marketing
Expense Budget. Each milestone is assigned a manager and that
manager has ownership of the task and is responsible for its success.
We will track our successes and failures by reviewing planned -vsactual results. Successes and failures will be reviewed and addressed
and a quarterly basi5.2 Marketing Organization
The founder of P & A.net INFORMATION WORLD, Pravin and Ashok,
has a BS from the University of Oregon in Marketing and Management
and will head the marketing effort. Initially, there will only be one
additional member of the marketing team, the "Custo mer Happiness
Representative." This position has not yet been filled, but it is the first
milestone that must be completed. The "Customer Happiness
Representative" will play a large role in implementing the different
marketing programs. A marketing manager will be hired during the
third or fourth quarter if revenues meet projections.
Contingency Planning
This marketing plan is just that, a plan. Plans don't always work out
and we have to be ready to deal with the likelihood that P & A.net
INFORMATION WORLD won't make good on the projections outlined
in this plan.
We also have to prepare ourselves for overwhelming success.
The following are some possible scenarios:
Revenues exceed projections - A serious increase in revenues over
projections will give us an opportunity to increase our marketing
budget above the allocated 20%. We'll be able to hire the marketing
manager earlier, and we'll be able to provide more equipment and
possibly add an additional location. Revenues miss projections - We
have to be prepared for this possibility. If we miss our projections, we
simply have to re-double our marketing efforts. The danger in this
scenario is that the first reaction to missed projections is to decrease
spending, particularly marketing expenses. We can't do that! We have
to get our message out to the target market, and we can’t do that if we
stop spending on marketing. Additional capital infusions may become
necessary and that possibility is detailed in the business plan.
Internet side of business plays a l esser role - Our customers might not
be willing to pay for Internet access or P & A.net INFORMATION
WORLD memberships as Internet access costs and hardware costs
Continue to fall. If this scenario materializes, we will need to move our
focus to beverages and pastry items, perhaps even providing deli -style
lunches. Internet services in the scenario would still play an important
role in attracting customers; we'd just have to charge less and move our
numbers around to accommodate this trend.